This is not my domain so my knowledge is limited, but I wonder if the chip designers have some sort of a standard library of ready to use components. Do you have to design e.g. ALU every time you design a new CPU or is there some standard component to use? I think having a proven components that can be glued on a higher level may be the key to productivity here.

Returning to LLMs. I think the problem here may be that there is simply not enough learning material for LLM. Verilog comparing to C is a niche with little documentation and even less open source code. If open hw were more popular I think LLMs could learn to write better Verilog code. Maybe the key is to persuade hardware companies to share their closed source code to teach LLM for the industry benefit?

There are component libraries, though they're usually much lower level than an ALU. For example Synopsys Designware:

https://www.synopsys.com/dw/buildingblock.php

Or learning through self-play. Chip design sounds like an area where (this would be hard!) a sufficiently powerful simulator and/or FPGA could allow reinforcement learning to work.

Current LLMs can’t do it, but the assumption that that’s what YC meant seems wildly premature.

The most common thing you see shared is something called IP which does mean intellectual property, but in this context you can think of it like buying ICs that you integrate into your design (ie you wire them up). You can also get Verilog, but that is usually used for verification instead of taping out the peripheral. This is because the company you buy the IP from will tape out the design for a specific node in order to guarantee the specifications. Examples of this would be everything from arm cores to uart and spi controllers as well as pretty much anything you could buy as a standalone IC.